PVEA presents to the Select Standing Committee on Finance and Government Services on why BC doesn’t need Site C

On Wednesday, October 8th, the PVEA participated in an opportunity to let the Select Standing Committee on Finance and Government Services know that Site C is not in the best interests of British Columbians. Following is our presentation:

Good morning,

My name is Ken Boon. I am a farmer and a log home builder and I live in the Peace River Valley. I am a director with the Peace Valley Environment Association, an organization whose goal is to create a truly sustainable land use plan for the Valley.

I want to thank you for the opportunity to make this presentation and appreciate the amount of information you are considering. I hope you’ll agree that one of the biggest financial issues on the table for this province right now is the Site C Dam and that is what I’d like to talk about.

I’d like to talk about Site C in terms of:

Its costs

Its need

Alternatives to it

And, additional cost considerations including the value of agricultural land and natural capital that would be lost if the dam proceeds.

The dam is proposed to cost $7.9 billion at a minimum. It will likely cost more, given that according to the World Commission on Dams, projects of this magnitude typically go into at least 50% cost overruns. In fact, just over a year ago, a boat ramp built by BC Hydro, just a couple of miles downstream from the proposed Site C location, went into cost overruns of 35%, with BC Hydro stating that it was a ‘challenging project in a challenging environment, combined with difficult weather and ground conditions’. Imagine how challenging the construction of a kilometre-wide dam that’s 60 meters high will be, over a proposed 7-year timeframe.

Regardless of the potential overruns, it is surprising that BC would consider pursuing this project given that a number of sources have articulated a lack of need for it. I’d like to start with the comments by economist, Dr. Marvin Shaffer, who told the Joint Review Panel on Site C that BC Hydro’s demand projections are incorrect because they are inducing new mining and oil and gas load with the offer of low cost power that it doesn’t have, giving rise to more load growth than what would be economically efficient.

Dr. Shaffer stated that the key factor underlying the forecast shortfalls is the elimination of the existing gas-fired Burrard Thermal plant as a source of back-up energy. The elimination of this alternative was determined without any supporting economic, environmental or other analysis and despite the recommendations of the BC Utilities Commission in 2008.

According to Dr. Shaffer, if Burrard were left in place, there would be no shortfall of energy until 2033. BC Hydro stated at the hearings on Site C that it would only cost $500 million to upgrade Burrard; significantly less than the $7.9 billion for Site C.

Alternatively, if there’s no hope of refurbishing Burrard, Dr. Shaffer suggested we consider single-cycle gas thermal plants instead of Site C. By way of example, the Shepherd natural gas plant in Alberta will generate power for $30 per megawatt hour, whereas energy from Site C is anticipated to cost up to $100 per megawatt hour. Not only is the cost of generation considerably less, but a natural gas generation plant that provides the same energy output as Site C could be built for one-sixth the cost ($1.3 billion) with a significantly smaller footprint of 60 acres versus the 57,000 acre impact Site C would cause .

Why is it ok to plan to build BC’s economy on the export of natural gas in the form of LNG, but it’s not ok to use this plentiful and relatively cheap resource domestically? It is firm, can be built incrementally, on an as-needed basis and in proximity to areas of need.

Energy expert Philip Raphals told the Joint Review Panel that Site C would produce a significant and unnecessary surplus of energy which would be exported at a loss. He also stated that BC Hydro make comparisons to alternative energy portfolio mixes with exactly the same output as Site C, which was unnecessary because when you’re considering alternatives, there’s no need to overbuild. Building incrementally wasn’t factored in to the comparison of alternatives. Mr. Raphals determined that even if BC Hydro’s greatest energy predictions are realized, Site C is still more expensive than a combined range of alternatives.

BC Hydro stated that Site C will operate at a loss of $800 million for the first four years of operation. This is, of course depending on the accuracy of their energy forecast projections which will be significantly affected by the existing proposed rate hike structure and dependent on the markets for our resource based products, a market which is extremely volatile.

Additionally, according to reports from BC Hydro, in 2013, it was selling 7,417 GWhrs of energy to ‘others’. ‘Others’ is not clearly identified, but the point is that it is being sold outside the province and constitutes 40% greater output than the maximum potential of Site C! Additionally the amount of energy sold to domestic customers in 2014 actually dropped by 8% from 2013. In fact, in general, since 2006, domestic demand has been considerably less than forecasted by BC Hydro. The demand has been in the low 50,000 GWhr range, whereas BC Hydro forecasted it to be well over 60,000 GWhrs by 2012.

The Joint Review Panel itself urged BC Hydro to carry out serious research into the tremendous geothermal potential in BC as an alternative to Site C as did the BCUC when they determined Site C was not necessary in the early 1980’s. They stated that they were surprised by the low level of effort put forth by Hydro in researching this option and that the effort should be renewed.

The Clean Energy Association of BC has identified significant stores of geothermal energy, with the six most likely prospects having the potential to provide over 1,000 MW – about the same as Site C. A hundred MW geothermal plant can provide 30-40 full-time jobs and only costs $400 million. Not only that, these plants operate at 98% capacity, whereas Site C would only operate at about half its maximum capacity.

Another very important rationale for not proceeding with Site C is the fact that over 30,000 acres of farmland would be washed down the river. This isn’t just any farmland, as experts at the hearings on Site C told the Panel, this land is necessary for BC’s future food sustainability. It has the potential to provide fruits and vegetables for over a million people and will be necessary as climate change continues to erode existing farmland that BC depends on for imports. We’ll soon be looking for ways to produce more of our food within the province.

According to agricultural economist, Wendy Holm, the long-term economic value of horticulture in the Valley is $2 billion – from farm gate sales and secondary economic activity. This is considerably more than BC Hydro forecasted at a mere $215 million over the same 100-year timeframe. There are many alternatives for energy, but there are no alternatives to Class 1 and 2 food producing agricultural land.

The David Suzuki Foundation recently completed a comprehensive analysis of the economic benefits of keeping the Peace River regions’’ remaining farmland and nature intact and found that it’s worth $7.9 to $8.6 billion per year!

I hope that each of you will seriously consider the rationales I have provided here as you deliberate on the necessity of including Site C in BC’s financial future. I would hope that the results of the research conducted by such a wide number of renowned experts will lead you to determine that Site C is not in the interests of British Columbians.

Thank you for this opportunity to provide input and I’m happy to answer any questions.